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Should Investors Be Excited About a Legitimized Marijuana Industry?

Equities.com invites you to watch Legalized: Making Sense of the Marijuana Green Rush our ground-breaking roundtable discussion on the impact of recreational marijuana's legalization in the United States. Our amazing panel of leading experts offer incredible insights from their perspectives of the regulatory, legislative, medical and business aspects of the industry. Click here to watch now.

The medical marijuana space is not only becoming a real legitimate business, but a very profitable one as well. There has been huge amount of interest and hype around the space and I thought it’s important for investors to sift through the bogus ones that will never generate any returns and concentrate on the ones that could generate the most profit. Medical marijuana is currently legal in 20 different states including Colorado and Washington, and is rapidly gaining popularity everywhere else. Even Dr. Sanjay Gupta of CNN has changed his stance about some of the benefits of medical marijuana.

It’s suddenly becoming a real business we need to pay attention to because this could soon become a massive investment opportunity. When the medical marijuana craze just started a few months ago, promoters and deal makers on the penny stock exchanges quickly found ways to drive investor interest to their stock by announcing that they were “discussing the possibility of getting into the medical marijuana space”. Unfortunately investors all around the world flocked to these guys and some were left holding the bag. Those days will some day be over and only the legitimate ones will survive. Investors that want to play around with marijuana stocks should stay focused on the ones that have the greatest potential to drive real growth. So here are a couple of companies I wanted to highlight that I think could potentially drive be winners in the space:

GW Pharma understands that marijuana actually has real medicinal properties and value. The company has a portfolio of cannabinoid-based prescription medicines currently in development to meet patient needs. These drugs are developed in house and use some of the most important ingredients in cannabis plants to treat a wide range of diseases. GW has assembled a large in-house team with extensive experience in developing cannabinoids, medicines containing controlled substances, as well as plant-based prescription pharmaceutical products. Unlike many others, GW also maintains in-house control over all aspects of the cannabinoid product development process.

GW Pharma’s stock has been going absolutely crazy. This is one of the hottest stocks on the Nasdaq at the moment and is showing no signs of slowing down. Take a look at this one year month chart below:

The stock is up over 970% on the year and is becoming one of the most popular stocks for anyone looking to take advantage of the marijuana space.

Now I know I said that there were many penny stock companies out there in the market today that jumped on the “marijuana band wagon” to see a lift in their stock but don’t have any real substance behind them. That is true for the majority of the marijuana deals out there today. However, since most of my personal investments are in more risky leveraged plays, I wanted to share one of my investments with everyone. I took a position in Chlormet Technologies (CSE:PUF) and own 600,000 shares in the company. If everything comes together and the numbers are proven, this could be one of the most exciting stories I’ve seen in a long time. Not only do they have an option to acquire AAA Heidelberg, a commercial facility in London, Ontario, Canada that is in the process of getting their MMPR license through Health Canada, but the company just announced last week that it has entered into an exclusive agreement with a licensed grow facility in Washington State called Babcock Bench Farms LLC (BBF). That’s the most exciting part about this story in my opinion. The marijuana market in Washington is absolutely massive and these guys already have their license in hand, so there’s no way we can shy away from this opportunity.

If you want to check it out for yourself, BBF has been approved under license Number 412996 for a Tier 3 marijuana Producer and Processor license in Washington State. Here is the essence of why I am so excited about the potential of this deal. BBF’s master growers anticipate production of between 1,350 and 2,150 lbs. of dried marijuana per quarter from their approved 21,000 square foot facility. According to the Rand Report, (a report which outlined the consumption of marijuana in Washington State based on a web-survey), the median price per pound of marijuana goes for around $2,000. Just by connecting the numbers ourselves, we can all see the massive income potential PUF has. PUF currently trades on the Canadian Stock Exchange and is sitting at around an $8 million market cap. Comparable companies in the weed space like Cannabis Technologies Inc. (CANLF) and Affinor Growers, Inc. (RSSFF) are trading at multiples of where Chlormet is currently at so there could definitely be a lot of upside from here.

As always, please do not hesitate to get in touch with me anytime if you have any questions. I look forward to hearing from you.

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